A Balanced Scorecard (BSC) is a strategic performance management framework for measuring the impact of strategic decisions across all organizational drivers of an organization. A BSC provides a wider perspective on strategic decisions made by an organization by measuring the impact on key business drivers such as finance, customer requirements, internal processes, innovation, and growth perspectives.
The BSC was conceived with the intent to overcome the limitations of traditional performance measurement tools. At the basic level, managers utilize it to track the activities of their direct reports and monitor the impact of their actions. At the decision-making level, a BSC is used both as a tool that facilitates strategic decision-making and as one that provides an insight into future performances.
Example of Balanced Scorecard?
An automobile manufacturer embraced BSC as a way to remain competitive in a rapidly evolving sector. The ensuing benchmarks show how BSC permeated into each department to coordinate the delivery of quality products and the ability to offer diverse models.